[15-05-2006] Dear IP 09
Number 9
10 June 1997
Dear Insolvency Practitioner
In this the ninth letter in the "Dear IP" series, I would like to deal with the Insolvency Regulations (NI) 1996 and the abolition of the requirement to submit an annual account of receipts and payments.
[Throughout this "Dear IP" letter, references to an account shall mean an account of receipts and payments.]
The Insolvency Regulations (NI) 1996 ("the 1996 Regulations") replaced the Insolvency Regulations (NI) 1991 with effect from 31 January 1997. The 1996 Regulations removed the requirement for liquidators/trustees to provide annual accounts. However, under Regulations 14(1) and 29(1) of the 1996 Regulations, practitioners must, during the course of their administration, send an account to the Department of Economic Development ("the Department") at any time that the Department so requires. The Department will require practitioners to submit an account 30 months after the making of the winding-up/bankruptcy order if a case has not already been completed by then and an annual account will be required thereafter until the practitioner has gained his/her release as liquidator/trustee.
Since 1 February 1997, practitioners have continued to submit annual accounts to the Department. Practitioners should no longer submit an annual account, but should comply with the following Departmental instruction:
(i) Cases post 31 January 1997
Practitioners should submit an account 30 months after the making of the winding-up/bankruptcy order unless the administration has been completed at an earlier date in which case a final account should have been submitted to the Department (under Regulation 14(3) or 29(3)). Thereafter an annual account will be required.
For example: a liquidator/trustee in an uncompleted case with a winding-up/bankruptcy order date of 3 February 1997 should submit a first account on 3 August 1999 and an annual account each subsequent year until the practitioner is released as liquidator/trustee.
(ii) Cases between 1 November 1994 and 31 January 1997
Practitioners should submit an account on the 30 month anniversary as set out above. In those cases where an annual account has already been submitted to the Department, no further account is required until the 30 month anniversary. The account submitted on the 30 month anniversary will cover the period from the date of the last annual account to the 30 month anniversary date. Thereafter an annual account will be required.
Example 1: in an uncompleted case where the winding-up/bankruptcy order was made between 1 November 1994 and 31 May 1995, the liquidator/trustee should submit an account covering the period of six months from the date the last annual account was submitted to the Department up to the 30 month anniversary date. This transitional period will allow all cases to be brought into a 30 month review period.
Example 2: in an uncompleted case where the winding-up/bankruptcy order was made on 1 November 1994 the liquidator/trustee should submit an account on 1 May 1997 to cover the period 1 November 1996 to 1 May 1997. In this instance annual accounts for the periods ended 1 November 1995 and 1 November 1996 will have been submitted to the Department.
Example 3: in an uncompleted case where the winding-up/bankruptcy order was made on 1 July 1995 liquidators/trustees will have submitted an annual account to the Department up to 1 July 1996 and a further account would, under the Insolvency Regulations (NI) 1991, have been required on 1 July 1997. In this instance the next account will be due on 1 January 1998 and thereafter an annual account will be required;
(iii)Cases pre 1 November 1994
Practitioners should continue to submit an annual account in all uncompleted cases where the winding-up/bankruptcy order was made prior to 1 November 1994.
Practitioners are reminded of the requirements of Regulations 14(3) and 29(3) whereby a final account to cover any periods not previously submitted shall be sent to the Department within 14 days of the holding of the final meeting of creditors or of the report to court.
I believe that practitioners will benefit from the easing of the requirement to submit annual accounts. If you have any queries regarding this "Dear IP" letter, please do not hesitate to contact the Insolvency Practitioner Control Unit, Fermanagh House, Ormeau Avenue, Belfast BT2 8NJ, either by letter or by telephone (01232) 548505 or 548504.
Yours sincerely
W R NESBITT
Director of Insolvency
